Economic inequality harms societies especially USA in many ways

This TED talk recorded in July 2011, by Richard Wilkinson, provides compelling research data (from UN and World Bank) on how income inequality within rich and developed countries (particularly USA) damage societies along many dimensions. According to his data, Singapore, USA and Portugal are the top three countries with biggest gap between rich and the poor (richest 20% than compared to the poorest 20%).

The countries plotted in per listed social attributes; USA is almost off the chart!

Here are the social attributes that are used in the index. A few may need some explanation.

  • Life expectancy — certain rich countries like USA have one of the lowest life expectancy! Japan that rates average in terms of income, has a very high life expectancy. As one would expect, within a society, rich people enjoy a higher life expectancy than the poor.
  • Math and literacy
  • Infant mortality
  • Homicides
  • Imprisonment — number of incarcerated people as well as the harshness of the sentences
  • Teenage births
  • Trust — proportion of the population who agree that most people can be trusted
  • Obesity
  • Mental illness — includes drug & alcohol addiction
  • Social mobility — whether rich parents have rich children and poor parents have poor children

On each of these attributes and social ills, countries with more income inequality (e.g. USA, UK, Portugal) do worse than those with less income inequality (e.g. Scandinavian countries such as Denmark Sweden, and Japan).

Sadly, USA scores worst time and again on most of the items in the list. In fact USA is at times off the chart compared to other countries! As Wilkinson says, “if Americans want to live the American dream, they should go to Denmark!” It is a 15 minute must-see talk. I have embedded the video here:

One of the key findings in this research as Wilkinson points out is: The average well-being of our societies is not dependent on any longer on national income or economic growth. That’s very important in the poorer countries but not in the rich developed world. But the difference between us and where we are in relation to each other now matter very much.

Another important point is that these social issues in rich unequal countries, also impact the rich adversely. If you are rich in such a society, you are not immune of these issues. You cannot isolate yourself.

Richard Wilkinson is a public health researcher, co-author of The Spirit Level, and co-founder of The Equality Trust, a non-profit aiming to reduce income inequality. He has also done this research on the 50 states of US and presents findings from that work as well.

This piece is based on my post on Tumblr from Oct. 2011.

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